New Valuation Date For Annual Tax On Enveloped Dwellings (ATED)
Annual Tax on Enveloped Dwellings (ATED) is an annual tax payable mainly by companies, partnerships with at least one corporate member, and certain collective investment schemes owning a UK dwelling valued at more than £500,000.
There are several ATED reliefs available, however even if 100% relief is available and no tax is due, annual returns must still be made to claim the applicable relief.
Where relief does not apply, the amount of ATED payable is calculated based on the value of each dwelling. The rates from 1 April 2022 are as follows:
| Value of dwelling | ATED due (before reliefs) |
| £500,001 - £1,000,000 | £3,800 |
| £1,000,001 - £2,000,000 | £7,700 |
| £2,000,001 - £5,000,000 | £26,050 |
| £5,000,001 - £10,000,000 | £60,900 |
| £10,000,001 - £20,000,000 | £122,250 |
| £20,000,001 and over | £244,750 |
Every five years there is a revaluation of the dwellings for ATED purposes. For the last five years, ATED has been considered by reference to the value of dwellings as at 1 April 2017. For ATED returns for the period commencing 1 April 2023, which are required to be submitted by 30 April 2023, the valuation date has changed to 1 April 2022.
For those that already submit ATED returns, having breached the valuation threshold at 1 April 2017 or on a subsequent property acquisition, and relief does not apply, it will be necessary to review the value of the relevant dwellings in case they have moved up an ATED band, as set out in the table.
In addition, for those companies, and partnerships with corporate members, with dwellings that have previously been below the valuation threshold, it is suggested that a valuation of the dwellings as at 1 April 2022 is obtained.Whilst there is no legislative requirement for a formal valuation, it would be sensible to obtain a formal valuation in the event it is scrutinized by HM Revenue and Customs.
HM Revenue and Customs offer a pre-return banding check where the value falls within 10% of an ATED threshold to allow the value to be agreed before an ATED return is submitted.
Where relief applies, a valuation does not need to be obtained, other than to confirm whether the value is over £500,000 such that an annual return needs to be submitted to claim the relief.
As always, it is important to take advice specific to your situation so please do speak with your advisor regarding any queries you may have.
Danielle Gay MAAT
Finance Assistant
Dani joined Evolution ABS in August 2019 and completed her AAT studies in August 2022. Dani coordinates our internal finances alongside Callum and Margaret. Dani also forms part of our Tax Team and assists Dan, Victoria and Peter with the delivery of various tax and trust projects.
Sitting on our Marketing Committee, she plays a big part in the delivery of our newsletter, ‘The Inside Track’, along with arranging our annual tent at the Honiton Agricultural Show.
Dani grew up on a dairy farm in East Devon and is a past member of Honiton Young Farmers Club. When Dani is not working, she enjoys being out in the countryside with her Cocker Spaniel, Bella.